Kirk M West's Blog

On June 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7, which establish the California Foreclosure Prevention Act.  The California Foreclosure Prevention Act modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program. Civil Code Section 2923.52 requires an additional 90 day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section.

A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52. Approval of this application provides the mortgage loan servicer an exemption from the additional 90-day period before filing the Notice of Sale when foreclosing on real property as designated by this Section.

So far 34 loan servicers/lenders have been granted immunity from the State's new law.  You may find a complete list at any of the following State of California sites:  Department of Real Estate, Department of Corporations, and the Department of Finanical Institutions. 

I found a link to all three respective sites at:  (scroll down and you will find the 3 links about half way down)  http://www.corp.ca.gov/FSD/CFP/default.asp 

What this means to you if you are current:   You may still request a loan modification of your existing liens.  In some cases you may now find it easier to work with your banks compared to just 6 months ago when the lenders and/or servicers would not even discuss a loan modification with anyone that was current.   If your mortgage(s) is held by fannie mae you may also qualfiy for a refinance up to 125% the value of your home.

What this means to you if you have applied for a loan modification:   I would recommend checking the list at the link provided above (http://www.corp.ca.gov/FSD/CFP/default.asp) and see if your lender or servicer is exempt from the additional 90 holding period during a foreclosure.  If you find them on the list, great news!!  They have a specific plan that they have shared with the State of CA focused on working with you to modify your mortgages.

What this means if you are in foreclosure:  Check the list.  If your lender or servicer is immune from the new law you will be subject to the same foreclosure timelines that have always existed. 

Whichever your situation, the law and overall attention that is being given to Foreclosure Prevention is a win win for everyone.